THE LOST WAR ON DRUGS

$500 Billion Illegal Trade Finances Terror, Crime, Misery

Poppies were the first thing that British army Capt. Leo Docherty
noticed when he arrived in Afghanistan's turbulent Helmand province in
April 2006. "They were growing right outside the gate of our Forward
Operating Base," he told me. Within two weeks of his deployment to the
remote town of Sangin, he realized that "poppy is the economic
mainstay and everyone is involved right up to the higher echelons of
the local government."

Poppy, of course, is the plant from which opium -- and heroin -- are
derived.

Docherty was quick to realize that the military push into northern
Helmand province was going to run into serious trouble. The rumor was
"that we were there to eradicate the poppy," he said. "The Taliban
aren't stupid and so they said, 'These guys are here to destroy your
livelihood, so let's take up arms against them.' And it's been a
downward spiral since then."

Despite the presence of 35,000 NATO troops in Afghanistan, the drug
trade there is going gangbusters. According to the UN Office on Drugs
and Crime (UNODC), Afghan opium production in 2006 rose a staggering
57 per cent over the previous year. Next month, the United Nations is
expected to release a report showing an additional 15 per cent jump in
opium production this year while highlighting the sobering fact that
Afghanistan now accounts for 95 per cent of the world's poppy crop.
But the success of the illegal narcotics industry isn't confined to
Afghanistan. Business is booming in South America, the Middle East,
Africa and across the United States.

Thirty-six years and hundreds of billions of dollars after president
Richard M. Nixon launched the war on drugs, consumers worldwide are
taking more narcotics and criminals are making fatter profits than
ever before. The syndicates that control narcotics production and
distribution reap the profits from an annual turnover of $400 billion
to $500 billion. Terrorist organizations such as the Taliban are using
this money to expand their operations and buy ever more sophisticated
weapons, threatening Western security.

In the past two years, the drug war has become the Taliban's most
effective recruiter in Afghanistan. Afghanistan's Muslim extremists
have reinvigorated themselves by supporting and taxing the countless
peasants who are dependent one way or another on the opium trade,
their only reliable source of income. The Taliban is becoming richer
and stronger by the day, especially in the east and south of the
country. The "War on Drugs" is defeating the "war on terror."

For the past three years, I have been traveling the world researching
a book on the jaw-dropping rise of transnational organized crime since
the collapse of communism and the advent of globalization. I have
witnessed how a ferocious drug gang mounted an assault on Sao Paolo,
closing the city for three days as citizens cowered at home. I have
watched Bedouins shift hundreds of kilos of cocaine across the
Egyptian-Israeli border on the backs of camels, and observed how South
Africa and West Africa have become an international narcotics
distribution hub.

The trade in illegal narcotics begets violence, poverty and tragedy.
And wherever I went around the world, gangsters, cops, victims,
academics and politicians delivered the same message: The war on drugs
is the underlying cause of the misery. Everywhere, that is, except
Washington, where a powerful bipartisan consensus has turned the issue
into a political third rail.

The problem starts with prohibition, the basis of the war on drugs.
The theory is that if you hurt the producers and consumers of drugs
badly enough, they'll stop doing what they're doing. But instead, the
trade goes underground, which means that the state's only contact with
it is through law enforcement, i.e. busting those involved, whether
producers, distributors or users. So vast is the demand for drugs in
the United States, the European Union and the Far East that nobody has
anything approaching the ability to police the trade.

Prohibition gives narcotics huge added value as a commodity. Once
traffickers get around the business risks -- getting busted or being
shot by competitors -- they stand to make vast profits. A confidential
strategy report prepared in 2005 for then British prime minister Tony
Blair's cabinet and later leaked to the media offered one of the most
damning indictments of the efficacy of the drug war. Law enforcement
agencies seize less than 20 per cent of the 700 tons of cocaine and
550 tons of heroin produced annually. According to the report, they
would have to seize about 70 per cent to make the industry
unprofitable for the traffickers.

Supply is so plentiful that the price of a gram of heroin is
plummeting in Europe, especially in the United Kingdom. According to
the UNODC, the street price of a gram of cocaine in the United States
is now less than $70, compared with $184 in 1990. Adjusted for
inflation, that's a threefold drop.

A surfeit of bananas drove 47-year-old Colombian Susan Castillo to do
business with terrorists. "It was about 10 to 15 years ago," she told
me. "We had built our farm and raised our seven children on corn and
bananas. But suddenly nobody wanted to buy our bananas anymore. We did
what everybody did then -- we switched from bananas and corn to coca.
Actually, we did not grow the coca ourselves but we rented out our
land to a cocalero and he grew the crop." Both the Castillo family and
the grower paid tax to the FARC -- the Revolutionary Armed Forces of
Colombia, a 17,000-strong peasant-based army, by far the largest
terrorist organization in the Southern Hemisphere.

I spoke to Castillo in the bare office of a local UN counseling center
in Ciudad Bolivar, a sprawling refugee camp that extends south from
Bogota and houses about one million people. A few weeks earlier, she
had been forced to leave her home after a pitched battle between the
Colombian military and the FARC near La Macarena National Park.

Next to the UN office stands a spanking new library, courtesy of Plan
Colombia, the $4.7 billion worth of drug-fighting assistance that the
United States gave to Colombia over the first half-decade of this new
century. Ninety-eight per cent of that money was devoted to beefing up
the Colombian armed forces' assault on coca plantations and left-wing
guerrillas. I was rather pleased to uncover one of its few civilian
outlets. All the library needs now is to open (it was padlocked), a
few books (there were none) and some people who can read (a rare
species in Ciudad Bolivar).

According to the Government Accountability Office, 70 per cent of the
money allotted to Plan Colombia never leaves the United States. It is
used to buy U.S.-built helicopters and other weapons for the military,
and a large chunk is paid to the security firm DynCorp. Britain and
other EU countries have so far resisted spraying Afghan poppy fields
with chemicals. But for several years, DynCorp has been spraying the
herbicide glyphosate on thousands of acres of coca in Colombia.

The impact of the eradication program has been negligible at best. The
FARC not only continues to control a swath of territory the size of
Switzerland in south-central Colombia, but it has established itself
in the north as well. The United Nations has identified coca
plantations in 24 of the country's 32 provinces, whereas it was grown
in only six when spraying began. But most embarrassing of all, before
his trip to Washington in May, President Alvaro Uribe was forced to
announce that production of coca was up eight per cent in 2006. Coca
production has been so ample that the wholesale price of Colombia's
best-known export has continued to slide throughout the course of Plan
Colombia.

Now the U.S. government wants to repeat this "success" in Mexico.
There's talk in Washington about a $1 billion aid package for the
government of President Felipe Calderon to back his own war against
drugs. And in Mexico, it's definitely a war: Calderon has mobilized
the army to fight traffickers. In the first half of this year, more
than 1,000 people were gunned down by rival drug cartels. Among the
dead were newspaper reporters, narcotics police investigators, judges
and politicians.

The collapse of communism and the rise of globalization in the late
1980s and early 1990s gave transnational criminality a tremendous
boost. The expansion of world trade and financial markets has provided
criminals ample opportunity to broaden their activities. But there has
been no comparable increase in the ability of the Western world to
police global crime.

International mobsters, unlike terrorists, don't seek to bring down
the West; they just want to make a buck. But these two distinct
species breed in the same swamps. In areas notorious for crime, such
as the tri-border region connecting Paraguay, Brazil and Argentina, or
in the blood-diamond conflict zones such as Sierra Leone and Liberia,
gangsters and terrorists habitually cooperate and work alongside one
another.

Those swamps are steadily seeping toward the United States. British
Columbia is now home to the greatest number of organized-crime
syndicates anywhere in the world (if we accept the UN definition of a
syndicate as more than two people involved in a planned crime).
According to B.C. government statistics, the production, distribution
and export of B.C. Bud, highly potent marijuana grown in hothouses
along the province's border with the United States, accounts for six
per cent of the region's gross domestic product. It now B.C. Bud,
highly potent marijuana grown in hothouses along the province's border
with the United States employs more Canadians than mining and logging
combined.

The majority of the province's criminals remain passive hippie types
for whom the drug is a lifestyle choice. But as Brian Brennan, the
chief investigator for the drug squad of the Royal Canadian Mounted
Police, told me, the marijuana trade is threatening to turn nasty as
British Columbia's Hells Angels, one of the best-organized criminal
syndicates in the world, moves in on the action. The drug trade is so
lucrative, he said, that when police seize growing operations in
houses worth $500,000, suspects simply abandon the properties. "They
are making so much money that they don't care about losing that
investment," he said.

An avalanche of B.C. Bud rolls southward into the United States every
day, dodging U.S. customs in myriad imaginative ways. But as the Hells
Angels and other syndicates get stronger and their control over the
port of Vancouver tightens, the ability of U.S. and Canadian
authorities to monitor the border becomes ever weaker.

Could anything replace the war on drugs? There's no easy answer. In
May, the Senlis Council, a group that works on the opium issue in
Afghanistan, argued that "current counter-narcotics policies ... have
focused on poppy eradication, without providing farmers with viable
alternatives." Instead of eradication, the council, which is made up
of senior politicians and law enforcement officials from Canada and
Europe, concludes that Afghan farmers should be permitted to grow
opium that can then be refined and distributed for medical purposes.
(That's not going to happen, as the United States has recently
reiterated its commitment to poppy eradication.)

Others argue that the only way to minimize the criminality and social
distress that drugs cause is to legalize narcotics so that the state
may exert proper control over the industry. It needs to be taxed and
controlled, they insist.

In Washington, the war on drugs has been a third-rail issue since its
inauguration. It's obvious why -- telling people that their kids can
do drugs is the kiss of death at the ballot box. But that was before
9/11. Now the drug war is undermining Western security throughout the
world. In one particularly revealing conversation, a senior official
at the British Foreign Office told me, "I often think we will look
back at the War on Drugs in a hundred years' time and tell the tale of
The Emperor's New Clothes. This is so stupid."

How right he is.